Corporate Accountability

Jesner, et al. v. Arab Bank, PLC

In Jesner, et al. v. Arab Bank, PLC, the Supreme Court considered whether corporations may be sued under the Alien Tort Statute (ATS), which allows the federal district courts to hear suits for torts “committed in violation of the law of nations or a treaty of the United States.”

Case Summary

Between 2004 and 2010, five separate lawsuits were filed in U.S. District Court claiming that Arab Bank, a multinational corporation based in Jordan, knowingly used its New York branch to finance international terrorism that led to suicide bombings and other attacks that resulted in the death, capture, or injury of thousands of innocent civilians in Israel, the West Bank, and Gaza. Victims of these terrorist attacks, their family members, and representatives of their estates all sued under the ATS. The Second Circuit Court of Appeals dismissed the suits on the ground that corporations cannot be sued under the ATS for violating the rights of individuals protected by the law of nations. The plaintiffs filed a petition for a writ of certiorari with the Supreme Court, which agreed to hear the case.

CAC filed a friend-of-the-court brief in support of the plaintiffs. In our brief, we argued that the Second Circuit’s interpretation of the ATS is inconsistent with both the text and history of the ATS and fundamental principles of corporate personhood, which permit corporations to be sued for wrongdoing. First, the text of the ATS does not distinguish among possible defendants, permitting suits against all defendants including corporations and other artificial entities. Corporations, like individuals, are bound by fundamental international norms held by all civilized nations. Indeed, the Second Circuit’s interpretation undermines the Framers’ purpose for enacting the ATS, which was to provide a federal forum to redress violations of international law. Second, from the Founding on, it has been the law that corporations may be sued for torts committed by their agents. Under these long-established principles, corporations are liable under the ATS for torts committed in violation of the law of nations to the same extent that individuals are.

The Court ruled, 5-4, that corporations cannot be sued under the Alien Tort Statute.  In dissent, Justice Sotomayor echoed arguments made in our brief, explaining why the majority’s decision got the text and history of the ATS wrong.  She also noted the irony in the majority’s decision: as the Roberts Court has rewritten the Constitution and federal laws to give corporations the same rights as individuals, the Court’s ruling in this case gives corporations greater rights than individuals and makes it impossible to hold corporations accountable when they violate basic human rights norms.

Case Timeline